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Integra brochure
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April 18, 2013

Integra Group Reports 2012 Financial Results and 2013 Order Book Update

 
MOSCOW, April 18, 2013 – Integra Group (LSE: INTE), one of the leading independent providers of diversified oilfield services, released today its Auditied Consolidated Financial Statements , prepared in accordance with IFRS, for the year ended December 31, 2012.

The Company ended 2012 in line with the expectations set out in the middle of the year. Starting from the third quarter the business returned to its run-rate profitability and 2H2012 margins were up strongly. Despite significant cost savings, overall 2012 profitability was affected by pricing trends that were not sufficient to fully offset the operating cost inflation. In addition, 2012 earnings were disrupted by a total of US$ 22.0 million of additional one-time expenses and lost margins related to incidents on complex long-term drilling and workover projects recognized in 1H2012.
In 2012 Integra Group achieved a three-fold improvement in cash flow from operations, generated positive free cash flow and significantly reduced overhead across all business units.
 
2012 Financial Highlights(1)
  • Sales increased by 1.2% to US$ 623.0 million (vs. US$ 615.8 million in 2011)
  • Adjusted EBITDA(2) from continuing operations decreased by 51.8% to US$ 37.7 million (vs. US$ 78.2 million in 2011)
  • Adjusted EBITDA margin decreased to 6.1% (vs. 12.7% in 2011)
  • Loss for the period from continuing operations amounted to US$84.6million (vs. profit of US$ 7.9 million in 2011)
  • Net cash generated from operating activities increased by 209.3% to US$ 76.4 million
    (vs. US$ 24.7 million in 2011)
  • Net debt as of December 31, 2012 was US$ 164.8million (vs. US$ 181.6 million as of December 31, 2011)
 
2012 Operating Highlights
  • 276 thousandmeters drilled (vs. 266 thousandmeters during 2011)
  • 27 active drilling rigs (2011: 26 active drilling rigs)
  • 3,555 workover operations conducted (vs. 3,711 workover operations during 2011)
  • 78 workover crews (2011: 77 workover crews)
  • 617cementing operations conducted (vs. 1,144 cementing operations during 2011)
  • 14 cementing fleets (2011: 13 cementing fleets)
  •  328coiled tubing operations conducted (vs. 341 coiled tubing operations during 2011)
  •  4 coiled tubing units (2011: 4 coiled tubing units)
  •  394wells completed with directional drilling service (vs. 425 wells during 2011)
  •  24 directional drilling crews (2011: 26 directional drilling crews)
  •  525downhole motors and 48turbodrills produced (vs. 476 downhole motors and 66 turbodrills produced during 2011)
     
2013 Order book update
  •  US$ 539.4 million (RR 17.2 billion) in tenders won and executed contracts in 2013, calculated on April 16, 2013 at exchange rate of 31.8RR/US$;
  •  of which US$ 465.2 million (RR 14.8 billion) is with respect to executed contracts for 2013;
  •  2013 total order book (executed contracts and tenders won) is 15.2% lower in Ruble terms compared to 2012 order book calculated on April 16, 2012 primarily due to the recent divestment of nine drilling rigs;
  •  Our 2013 order book is denominated in Russian rubles.
 
Felix Lubashevsky, Integra Group’s President and Chief Executive Officer, commented:
”We believe we have achieved a turnaround in our performance in 2H2012 through rigorous cost control and several important changes to our business processes. This is evidenced by a significant pickup in margins compared to 1H2012 and strong cash generation.
We have also taken a number of strategic steps aimed at crystallizing value for our shareholders. At the turn of 2012-2013, Integra completed the spin-off of its seismic business and distributed the proceeds to its shareholders in a form of a dividend in specie. We have also completed a transaction in early 2013 that optimized and improved our drilling rig fleet.
Our focus in 2013 remains on quality improvement, select capacity investment and further cost optimization.”
 
 
The AuditedConsolidated Financial Statements, prepared in accordance with IFRS, for the year ended December 31, 2012 can be found under the following link: 
http://www.integra.ru/eng/investors/results/
For additional discussion and analysis of our financial results for the year ended December 31, 2012, please see our Management's Discussion and Analysis of Financial Condition and Results of Operations, which can be found under the following link: 
http://www.integra.ru/eng/investors/results/
For additional information please see our Corporate Governance Statement under the following link:
http://www.integra.ru/eng/company/corporate_management/regulations/


Conference Call Dial-In Details
 
Date:                                      Thursday, April 18, 2013
Time:                                     17:00 Moscow / 14:00 London / 9:00 New York
Title:                                       Integra Group 2012 Results
Conference ID:                      32537293
UK international tel.:               +44 1452 555 566
USA international tel.:            +1 866 966 9439
 
There will also be a playback facility available until May 17, 2013. The details are:
 
UK international tel.:
 
+44 1452 550000
USA free tel.:
+1 866 247 4222
Access code:
325372932#
 
 
Contacts
 
 
 
Integra Group
 
 
Andrey Machanskis
Head of Investor Relations
 Tel. +7 495 933 0621
 
_______________________
(1) Operations of Integra Group’s Formation Evaluation segment were discontinued following a combination of the seismic businesses of Integra, Schlumberger and Geotech and were excluded from 2011 financial results for comparison purposes.
(2) Adjusted EBITDA is calculated as profit (loss) from continuing operations before finance income (expense), exchange gains (losses), current and deferred income taxes, depreciation and amortization, impairment, write-off or disposal of property, plant and equipment or intangible assets, gains (losses) on acquisition and disposal of any interest in the Group’s subsidiaries or associates, impairment of goodwill, share of results in associates, share-based compensation and profit (loss) attributable to non-controlling interest.
_______________________
 
Some of the information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of Integra Group. You can identify forward-looking statements by terms such as “expect,” “believe,” “anticipate,” “estimate,” “intend,” “will,” “could,” “may” or “might,” or the negative of such terms or other similar expressions. These statements are only predictions and actual events or results may differ materially. Integra Group does not intend to or undertake any obligation to update these statements to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. Many factors could cause the actual results to differ materially from those contained in Integra Group’s projections or forward-looking statements, including, among others, general economic and market conditions, Integra Group’s competitive environment, risks associated with operating in Russia, rapid technological and market change, and other factors specifically related to Integra Group and its operations.
 
This document does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities of Integra Group, nor shall any part of it nor the fact of its distribution form part of or be relied on in connection with any contract or investment decision relating thereto, nor does it constitute a recommendation regarding the securities of Integra Group.